Take back Your Co-op

by Django ZeamanWe designed this website to help member-owners of La Montañita reclaim our Co-op, but we also want to help other member-owners around the country take back their co-ops. You and your fellow member-owners or workers may be going through a similar set of confusing, painful experiences right now. We know what it’s like! You're not alone. We’re here to say: there is hope.“Our co-op board is acting strange. What’s going on?”That’s usually the first clue: your board starts acting “strange.” They suggest a change to the co-op that seems counter to the mission, they stop talking with member-owners, they don’t answer questions, and when they do, they respond with vague, confusing statements wrapped in positivity and good vibes.You can try talking with them and filling out surveys. You can attend board meetings, special informational sessions, and cafes, for months and even years. Based on our experience—and the experiences of people at co-ops around the country—nothing changes. In fact, you’re playing into their hands. They have been prepped to expect you. They’ve been trained to rebuff and resist the involvement of member-owners and workers.“How do I know if my co-op is in trouble?”The first thing to do is a Google search for the name of your co-op and CDS Consulting. If your co-op board is being advised by CDS Consulting, then it’s probably only a matter of time until you start to experience what we have been through.You can also search the minutes of your board’s meetings. They often list guest speakers and reading material provided by CDS Consultants.Another strong clue may be in the bylaws of your co-op. If the Special Membership Meeting (SMM) clause now has the words “advisory only” or something similar, then the CDS infiltration is fairly advanced at your co-op and it’s going to be much more difficult, though not impossible, to reclaim.“What do we do if we find out that CDS has infiltrated our co-op?”It’s important to figure out the degree of infiltration. CDS tends to be patient and gain control over a period of years:Stage 1: TrainingCDS usually starts its relationship with co-ops by providing advice and inviting your board to attend CDS conferences. They may also suggest “board study,” which is monthly training for board members using CDS-approved materials. Even though this is Stage 1, it’s a very serious stage and can do a lot of damage.If your board has been exposed to CDS training for years it can be difficult to help them see that CDS has been leading them astray. They may regard the CDS case studies, market analyses, and white papers as the gospel and have a very hard time being able to hear that CDS's goal (making money for CDS) is not congruent with the mission, direction, and cooperative principles we hold dear. No one wants to look foolish, admit that they were duped, or acknowledge that they caused harm to their co-op, especially when they thought they were serving it.Stage 2: StandardizingOnce CDS has gained the trust of a co-op’s board, they often suggest that the board “freshen up” their bylaws with their “Fresh Start Bylaws Template Guide.” If you look at your co-op’s bylaws and see similar language or whole sections that are copied from the CDS template, your co-op is at least at Stage 2 of CDS infiltration.In order to change the bylaws, member-owners have to vote. So if your bylaws were changed recently, you may be able to find records that reveal what concerns were raised at the time.However, CDS has started using another technique, which is to notchange the bylaws because they know the process of voting can draw attention to their actions. The last thing they want is for member-owners to get wind of what they are up to. Instead, they advise your board to adopt the Policy Governance model and to write a board Policy Manual. Neither is legally binding.

At our Co-op, we have just such a Policy Manual and it looks very official and is listed on our website next to the bylaws. However, there is no mention of the Policy Manual or the Policy Governance model anywhere in the bylaws. In other words, those “policies” don’t have any legal standing. When you reclaim your board you can toss them in the trash. It’s basically a clever technique for indoctrinating new board members into a way of thinking and acting, while never making the policies official by going to the member-owners for a vote.So if you see standardized bylaws, the Policy Governance model, or a Policy Manual, you know your co-op has reached this stage.Stage 3: ExpandingStages 1 and 2 lay the foundation so CDS can push through expansion plans at a co-op without facing too much resistance.So, has your co-op expanded recently? Did you open a new location or two? Did your co-op go through a big remodel? If CDS is advising your board and new bylaws or “policies” were adopted, and if the answer to one of the above questions is “yes,” then your co-op is at Stage 3.If your co-op is at Stage 3, it’s also likely that your co-op has taken on debt. Your co-op may have loans with CDS, NCG (National Co+op Grocers), or another party for whom they brokered the loan. When your co-op owes money and becomes financially unstable, it sets you up for Stage 4. But don’t despair, even at this stage, it’s still possible to reclaim your co-op and get it back on sound financial footing.Stage 4: OutsourcingCDS would prefer to manage just about everything at your co-op, while charging your co-op for their services. It’s a double win for them: they gain more control and they get paid.In the final stage of infiltration they will start to become much more bold and will directly control some of the following: inventory management, accounting, store management, human resources, hiring the General Manager, etc. In some cases they will even install a CDS consultant as the General Manager.Our StageOur Co-op is past Stage 3 and starting to move into Stage 4. However, we’re fortunate that CDS wasn’t able to change our bylaws to amend the SMM clause, so we still have a clear path to reclaiming our Co-op.Honest Weight Co-op in Albany, NY was past Stage 3 and they successfully held an SMM, removed board members, fired CDS, and reclaimed their co-op. They’ve restored their co-ops values and have even started to turn the corner financially.If you can catch the infiltration at Stages 1 or 2 that is certainly preferable, but even in Stages 3 or 4 it isn’t too late, you just have to be ready for what you’ll face.“How do we take action? What do we do first?”The first step is education. Our recommendation is to share the articles written by Mimi Yahn, the website for Honest Weight Co-op's grassroots action, and our website with other concerned member-owners at your co-op. Once people understand what is going on, it’s a lot easier to organize and strategize about what to do next.We’re happy to talk with folks at other co-ops. Please contact us through the form on the front page of this website or at Django@TakeBackTheCoop.com. Explain your situation and we’ll do our best to contact you and offer any support we can.Our long-term goal is to build an association of co-ops who have fired CDS and want an alternative to NCG. There are over a million co-op member-owners who feel the way we do and only 40 CDS consultants. Once people find out what has been happening, we have a tremendous advantage, but we have to be organized, we have to get the word out, and we have to take the right actions to reclaim our co-ops. CDS and their allies will fight us every step of the way. This is a HUGE business that they currently control and they don’t want to lose it (NCG co-ops do $1.7 billion in revenue each year). You can’t take your co-op back by yelling at the board or CDS consultants; it won’t do any good and it may do harm. Instead, member-owners would be better served by exercising their ownership rights and taking action through elections and SMMs. That means having a lawyer or two involved and working with your co-op bylaws as well as the state cooperative laws. We realize it’s upsetting and we've spent many nights frustrated and angry too. But the only way we fight these corporations successfully is by calmly exercising one of the seven principles of cooperatives: Democratic Member Control.Contact us and we can share our experiences and help with some of the details, but make no mistake: going down this path means rolling up your sleeves and doing a lot of work. It’s writing and getting signatures and talking to people and running candidates for the board and getting out the vote.

Fortunately, it can also be invigorating to talk with your fellow member-owners and find out just how many people feel similarly. It can build a much stronger bond in your co-op community than you ever had before.